Feds extradite former ‘ER’ actor in $7 million COVID scam

From Washington Times.com (May 4, 2022):

The federal government has managed to extradite a man accused of bilking the government out of more than $7 million in COVID-19 money, marking the first person to be brought back from overseas to face prosecution.

Authorities said Don V. Cisternino was brought back from Croatia to face wire fraud, identity theft and illegal monetary transactions charges.

The government’s willingness to get Mr. Cisternino back to the U.S. for prosecution marks a new chapter in attempts to police the hundreds of billions of dollars in pandemic assistance money that experts believe was stolen by fraudsters, much of it flowing overseas.

“This matter demonstrates that the department will aggressively go after anyone who stole pandemic relief funds, whether they are in the United States or hiding overseas,” Kevin Chambers, director of the Justice Department’s COVID-19 fraud enforcement team, said Tuesday.

Mr. Cisternino, who has an acting credit from an episode of the television show “ER,” was living in Florida when the government was issuing pandemic relief, though it was his New York-based company, MagnifiCo, that he used to apply for funds through the Paycheck Protection Program.

The program, known as PPP, was designed to help companies keep their doors open during the early days of the pandemic shutdowns.

MagnifiCo claimed to have 441 employees and a monthly payroll of nearly $3 million. It said it needed money to make payroll or pay rent. The company was approved for a $7.2 million PPP loan.

Investigators said Mr. Cisternino had no employees other than himself and his girlfriend, and he reported no wages to the IRS in 2019. Of the employees he claimed, 130 had made-up Social Security numbers, 150 were listed with real numbers that belonged to others, and three were dead when they were listed as MagnifiCo employees, an IRS agent told the courts.

Investigators said the loan money was deposited into a single account and was used for plenty of things, but not for keeping the company afloat. Among the expenses that did register were $89,413.71 at a Lincoln dealership, $251,436.21 at a Mercedes-Benz dealership and $48,477.26 for the “payoff” of a Maserati.

Mr. Cisternino also appears to have bought a home in Chuluota, Florida, in the summer of 2020, for $3.5 million. The Justice Department filed a forfeiture notice on that home in December 2020.

That forfeiture may have spooked Mr. Cisternino. By the time he was indicted on criminal charges in February 2021, he couldn’t be found.

Croatian police nabbed Mr. Cisternino a year ago after he crossed the border from Slovenia, according to Croatian news reports.

He told reporters at the time that he fled because he feared the Biden administration would crack down on fraud that was accepted during the Trump administration. In fact, the forfeiture was filed while President Trump was in office.

The government’s seizure of the home was completed last summer, and Mr. Cisternino never contested it. The home’s 12,579 square feet cover seven bedrooms, 11 bathrooms and a theater. It also has a “resort style” pool, tennis courts and a five-stall horse stable. Realtor.com listed the home as sold this year for a price of $4.1 million.

The PPP program, run by the Small Business Administration, is just one of several pandemic assistance efforts beset by fraud.

Experts say more than $150 billion, and perhaps more than $250 billion, may have been stolen from enhanced unemployment benefits. A large chunk of that was stolen by overseas actors, including criminal syndicates with roots in Nigeria, Russia and Romania.

A Nigerian man pleaded guilty Tuesday to charges of wire fraud and aggravated identity theft in a scam that netted more than $600,000 in unemployment benefits from 18 states. Abidemi Rufai also stole money from the Economic Injury Disaster Loans program, which like the PPP was run by the SBA.

Rufai was scamming the government even before the pandemic. The Justice Department said he filed 675 false tax claims with the IRS from 2017 to 2020. Most were unsuccessful, but Rufai did get $90,877 from the IRS in bogus payments.

Rufai’s jump from that relatively small fraud to the much larger unemployment fraud underscores the problem experts identified with the pandemic programs, which offered massive amounts of cash without requiring the kinds of basic identity checks that are common in the private sector.

Authorities say Rufai was arrested in May 2021 when he arrived at an airport in New York.

The Congressional Research Service reported last month that 20 of the 50 states were not using all the required cross-matching checks before paying out pandemic unemployment benefits. [source]

There hasn’t been a gov’t program that hasn’t been scammed.